Retirement Homes Struggle to Attract Occupants

Lack of demand stymies a sector that would seemingly be ripe for development in rapidly aging Taiwan.

The Chang Gung Health and Cultural Village retirement facility has the feel of a college campus. Set amid the wooded hills of Taoyuan County, the sprawling complex has numerous sports and leisure facilities, dining halls and restaurants, convenience stores, and activities centers. Fit, active seniors greet visitors with warm smiles and strong handshakes, and many of the village’s outdoor recreational offerings are open to the public to enjoy.

Costs, meanwhile, are surprisingly low, with many residents paying around NT$35,000 per month, including rent, meal plans, and utilities.

Despite these strong attributes, the 2,000-unit facility, affiliated with Chang Gung Memorial Hospital, itself associated with the Formosa Plastics Group, is only half full. Several of the structures originally conceived for the site remain unbuilt – and are unlikely to be constructed. The original planned capacity of 3,800 units has been shelved for now.

The Ruen Fu New Life retirement village, located close to downtown Tamsui, is filled to capacity, but with only 300 rooms is a much smaller complex. And despite having a waiting list, the facility – an investment of the Ruentex Group of Samuel Lin – has no plans for expansion.

Unlike other advanced countries that are likewise seeing surging numbers of elderly, Taiwan is not experiencing a reciprocal rise in senior housing. According to figures from the Ministry of Health and Welfare, as of 2016 there were slightly more than 61,000 living units in Taiwan for seniors, but only 47,000 were occupied – an occupancy rate of 77%.

Ruen Fu’s Chairman Chang enjoys a meal at the retirement home he oversees. Photo: Timothy Ferry

Most experts agree that cultural notions of filial piety tend to deter seniors and their families from considering retirement homes as an option. “In Chinese culture, even today, it is generally not considered respectful to send elderly relatives to retirement homes or other places where they may feel abandoned,” says Chang Tzu-ching, chairman of Ruen Fu Newlife Corp.

As a result Ruen Fu’s plans initially met with a great deal of public skepticism when it opened in 1996, says Chang, “but now a lot of retirees realize that they can get a better quality of life here.”

Still, “there is not really a large demand for this kind of housing,” says Kevin S. Yeh, Chang Gung’s head of marketing.

Many of the seniors who have taken up residence in retirement villages are without close family members in Taiwan, and Chang Gung reports that up to 40% of its residents actually lived abroad for most of their lives, most in the United States, before returning to the far cheaper environs of Taiwan, with its low-cost medical system and cheaper care.

Ruen Fu’s chairman notes that the lack of affordable land and human resources are also major obstacles for expansion of the retirement-home sector. “We do not plan to expand our capacity at this time, until we can secure the right locations and the right staff,” the company noted in written correspondence.

Further, unlike the United States where elder care is big business, rates in Taiwan are capped by government regulators. Both Ruen Fu and Chang Gung note that despite their businesses being run as for-profit entities, neither has ever turned a profit and they are both supported by the respective industrial conglomerates that founded them.

Nevertheless, those in the industry are guardedly optimistic about the future. “People are getting old and need the care,” says Chang Gung’s Yeh. “Since family members don’t have the ability or skill to care for them, in the future there will be more demand for many diverse systems of care for the elderly.”

Taiwan Business TOPICS

Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei, and covers current topic affecting business conditions in Taiwan, an Industry Focus section on a particular industrial sector, and other reports prepared by the magazine’s staff of experienced professional journalists.